High-tech advances entice new wave of scientists and programmers to financial markets

Posted by: Anu Chandra on 03-08-2017

A host of emerging investment managers imbued with a solid grounding in science and algorithms represent the cutting edge of disruption on Wall Street.

“We’re the new generation,” says Shalin Madan, chief investment officer of Bodhi Tree Asset Management, which he set up after 20 years of investing in hedge funds himself. After seeing how the industry was evolving, he said the choice was simple. “I had the choice between being the disrupter or the disrupted.”

Quantitative hedge funds that use complex algorithms to sniff out and systematically take advantage of millions of small but lucrative trading opportunities across the world are proving increasingly popular, reflecting in part a long run of underwhelming performance and expensive fees across the broader industry.

Now, the widening access to faster and cheaper computing power, coupled with an explosion of new digital data sources like satellite images, internet chatter and online commerce, has encouraged a new wave of scientists and programmers to turn their expertise towards financial markets.